REGARDING SECTION 44AE
This query is : Resolved
Suresh S. Tejwani
(Querist)
18 June 2026
If Assessee is having 9 Trucks & gross receipts is more than 2 crore.
can we file return ITR-4 under section 44AE or required tax audit??
can we file return ITR-4 under section 44AE or required tax audit??
18 June 2026
Whether you are required to have a tax audit or can file ITR-4 depends on the interaction between Section 44AE, Section 44AB, and your declared income.
1. Eligibility for Section 44AE
Section 44AE applies to any assessee engaged in the business of plying, hiring, or leasing goods carriages, provided they own not more than 10 goods carriages at any time during the previous year.
Since you own 9 trucks, you meet the ownership criteria to opt for the presumptive taxation scheme under Section 44AE.
2. Is a Tax Audit Required?
Under Section 44AB (Tax Audit), an audit is mandatory if:
Your gross receipts/turnover exceed the specified threshold (currently ₹1 crore, or up to ₹10 crore if cash receipts/payments are ≤ 5%).
Crucially, if you are eligible for the presumptive taxation scheme (like 44AE) and you choose to declare income lower than the deemed profits prescribed under that section, you are required to have your books of account audited if your total income exceeds the basic exemption limit.
Summary for Audit:
If you declare income at or above the presumptive rates prescribed in Section 44AE, you are generally exempt from a tax audit, regardless of your gross receipts.
If you declare income lower than the rates prescribed in Section 44AE, a tax audit under Section 44AB is mandatory.
3. Can you file ITR-4?
ITR-4 (SUGAM) is designed for assessees opting for presumptive taxation schemes (Section 44AD, 44ADA, and 44AE).
Yes, you can file ITR-4 if you are eligible for the 44AE scheme.
Note: If you are required to undergo a tax audit (because you declared income lower than the 44AE rate), you must still ensure you use the correct ITR form. Generally, when a tax audit is applicable, you may be required to file ITR-3 instead of ITR-4, as ITR-4 is typically for cases where a tax audit is not required.
1. Eligibility for Section 44AE
Section 44AE applies to any assessee engaged in the business of plying, hiring, or leasing goods carriages, provided they own not more than 10 goods carriages at any time during the previous year.
Since you own 9 trucks, you meet the ownership criteria to opt for the presumptive taxation scheme under Section 44AE.
2. Is a Tax Audit Required?
Under Section 44AB (Tax Audit), an audit is mandatory if:
Your gross receipts/turnover exceed the specified threshold (currently ₹1 crore, or up to ₹10 crore if cash receipts/payments are ≤ 5%).
Crucially, if you are eligible for the presumptive taxation scheme (like 44AE) and you choose to declare income lower than the deemed profits prescribed under that section, you are required to have your books of account audited if your total income exceeds the basic exemption limit.
Summary for Audit:
If you declare income at or above the presumptive rates prescribed in Section 44AE, you are generally exempt from a tax audit, regardless of your gross receipts.
If you declare income lower than the rates prescribed in Section 44AE, a tax audit under Section 44AB is mandatory.
3. Can you file ITR-4?
ITR-4 (SUGAM) is designed for assessees opting for presumptive taxation schemes (Section 44AD, 44ADA, and 44AE).
Yes, you can file ITR-4 if you are eligible for the 44AE scheme.
Note: If you are required to undergo a tax audit (because you declared income lower than the 44AE rate), you must still ensure you use the correct ITR form. Generally, when a tax audit is applicable, you may be required to file ITR-3 instead of ITR-4, as ITR-4 is typically for cases where a tax audit is not required.
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